ECB’s Rehn: Anchoring Expectations Absolutely Essential; Hike Likely in December

17 November 2022

By David Barwick – FRANKFURT (Econostream) – It is critical that the European Central Bank keep inflation expectations under control, ECB Governing Council member Olli Rehn said on Thursday.

In a speech at a seminar, Rehn, who heads the Bank of Finland, said that ECB monetary policy was being tightened because ‘inflation has accelerated in the course of this year, both in the euro area and in Finland, far too fast.’

‘Interest rates will probably be raised again, the next time in December’, he said. ‘From the point of view of the success of monetary policy, keeping the inflation expectations of consumers and companies stable is absolutely essential. In the longer term, the development of wage inflation is key.’

The Finnish economy will experience a ‘slight recession’ late this year and early next, he said.